At the end of July I got an email reminder from Geico about my next car insurance payment: my six-month premium, due September 1, would be $447.

That seemed … wrong. Too high. I went back and checked what I’d paid five months previously: $409 for the six months from March through August. Sure enough, they were raising my rate.

Sadly, Jak and I both have moving violations on our records, from December 2010 in my case and January 2011 in his. He took a left turn downtown a few minutes after the 3p-6p ‘no left turn’ went into effect. I went driving (at night, in the rain) after taking a prescription Ativan for anxiety, and found out the hard way that Ativan causes me to microsleep.

Up until recently, we’d been insured with Progressive for several years running. I had been comparing rates once or twice a year, but no one else would beat their quotes. This year, though, Progressive’s rate ticked up — not by much, but enough that they were no longer rock-bottom. When we came up for renewal in February, Progressive wanted $437. Geico offered me $409.

I had no beef with Progressive, but twenty-eight bucks is twenty-eight bucks. I switched.

Now Geico wanted $447. I knew that as the black marks on our records recede farther into the past, our rates should be getting lower with each successive renewal, not higher.

Cynically, I suspect a calculated strategy on Geico’s part: undercut by just a little to get me to switch, then inch the rate up and hope that either I don’t notice or I don’t bother to do anything about it. It’s probably a strategy that works far too often, because a lot of people are busy and don’t prioritize insurance rate comparison. I am not immune; I’ve failed in the past to regularly price check our home insurance, mostly because it was wrapped into our mortgage payment and out of sight is too often out of mind.

But if that was Geico’s plan, it backfired. Time to go shopping!

I don’t like to go to consolidated lead sites for car insurance because they don’t give immediate quotes — they take your information and give it to various agents who will then call you. I do not want to wait hours or days for my quotes, I don’t want to talk to salespeople on the phone, and I definitely don’t want them calling me at random times. I want to get an online quote, pick the best offer, and execute the transaction, preferably without ever speaking to a human.

So I always go right to the sites of the individual insurance companies, even though it means typing in the same information six times instead of once or twice. You pick your poison, and that’s mine.

The first place I went for a quote was right back to Progressive. Their new offer for six months: $351. A whole $86 less than it had been five months ago, and $96 less than Geico wanted now. Boom!

I didn’t stop there, though. I also got online quotes from Ameriprise, Allstate, and MetLife.

Met Life won the award for Most Outrageous Quote: $1263. That’s nearly twice as much as the next highest offer, and almost four times more than we ended up paying. This, my friends, is why you should never get just one quote, or even two. Because you might turn up that wacky outlier, and then you’re screwed and you don’t even know it. Personally, I like to get five.

Allstate was also out of the range, with an offer of $658. The ultimate winner? Ameriprise, with a six-month premium of $334, beating even Progressive by $17. Plus — not a factor in my decision, but a nice after-the-fact perk — free roadside service coverage, thanks to my Costco membership.

Now that I had a much better offer in hand, I didn’t wait for my existing coverage to expire. I told Ameriprise to start coverage August 1, then called Geico and cancelled effective July 31. Geico refunded me a prorated amount for the month of August.

Yeah, they’ll do that. I always pay auto insurance up front in six-month blocks, because the total amount is cheaper than if you pay monthly. But it took me years to catch on that even if you prepay, you can cancel and get a refund at any point. It’s not the kind of thing the insurance companies like to advertise, because they’d really rather keep your money, but car insurance isn’t like a crappy cell-phone contract. You’re not locked in. You don’t even have to finish out the month (although I like to, just to keep things orderly). I could turn around tomorrow and sign on with someone else.

Even though I lowered my rate, the process was not all smooth sailing. Here are the snags I encountered:

Some of the web sites are fail. One site from another major company (I’ve now forgotten which) I could never get to function at all, though I wasted five or ten minutes trying. Ameriprise’s site was hit-and-miss; the first time I filled out several pages of quote questionnaire only to get a nonspecific error message. The second time I did the exact same thing, it worked fine.

With both Progressive and Geico, I had been able to purchase coverage via the web. Because of Ameriprise’s borky web site, I had to call and talk to a person, and reanswer most of the exact same questions I’d already typed online when I was getting the quote. Sigh.

Since I was cancelling my policy early instead of just letting it expire, I also had to call Geico, which meant sitting through the rep’s lame attempts to convince me that I really did want to pay more for Geico because it was intrinsically better. No thank you; I’m already comparing apples to apples here, and you’re just wasting my time.

Ameriprise required a lot of paperwork. On actual paper, sent by mail. We first signed up with Progressive so many years ago that I have no idea whether we had to sign hardcopy agreements, but I know Geico didn’t require any such thing last spring. The only saving grace: postage-paid envelope.

Once the paperwork arrived, I saw that part of the fine print of the Ameriprise deal — and possibly the reason why they needed hardcopy signatures? — was authorization for them to auto-bill our credit card every six months. I was not thrilled by this, because it makes it just a little bit more likely that they can slip something by me. But these days I’m good at keeping a close eye on the financial stuff, so I let it ride. I did set a bill alert on Mint for five months from now, though. Just to be safe.

The Geico rep told me that the refund would go to my credit card (yay) but instead it showed up as a paper check (boo). Now I have to make a special trip to the bank to get my money. Again, I’m suspicious of their motives — are they perhaps hoping I’ll lose the check?

Still, for the price of a few hours’ time and some minor annoyance, I saved us $113. Definitely worth it. And in five or six months, I’ll do it all over again.

It’s a good idea to comparison-shop your auto insurance rates twice a year, always. But it’s especially important if any driver in your household has had any kind of moving violation, accident, or claim in the past five years. You will probably save yourself hundreds, maybe even thousands of dollars per year if you do.

• • •

Coming soon, an Auto Insurance Primer: I’ll explain all the different types of coverage, demystify the jargon, separate the necessities from the ripoffs, and suggest strategies for lowering your premiums without taking on undue risk.

7 responses

I understand your suspicions and you may be right that they are trying to gouge you, but I have to say that I have had Geico for years and they have never jacked up my rate–in fact, in the past year, they lowered it once and sent a refund (based on a periodic review of my credit score, not a request from me), and then went back farther to lower it retroactively and sent another refund. Plus my policy has roadside service coverage for $1.40 a month, which for me is close enough to free and is fabulous–I use it constantly because my Prius’s battery dies at the drop of a hat, and there is no paperwork and they never hassle me about it.

To me, good customer service and convenience make things seem not quite apples to apples, but I get your point about cost being the bottom line. And I will definitely get some quotes after I read your upcoming post!

Amanda, those two things are not mutually exclusive — they could very well be wanting to keep an existing customer in your case, and lure in a new one in mine. Though certainly lowering your rate retroactively with no input from you is going above and beyond the usual! Maybe I’m just excessively cynical. :)

However, without checking what other companies would have charged you, you can’t assume that even Geico’s lowered rate is the best one. Maybe they dropped your rate by $100 to keep you feeling loyal, but you could have saved $300 somewhere else. Or $1000. How would you know?

I agree that good customer service and convenience are valuable. However, I have not yet had bad customer service anywhere, so until that happens it’s a pure price competition.

Partly I was responding to three things you mentioned about Ameriprise (hit-or-miss website, long paper application, auto-billing your credit card as only option), which seem not so customer friendly. But partly I was talking about myself: since I like Geico and have had only positive experiences dealing with them, the savings would need to be significant for me to leave them. Now that I see how much you saved, it seems worth checking out.

Yeah, I consider those things minor annoyances, not poor customer service per se, but they do add up, and at some point it would be not worth the savings. Apparently that point for me is something south of $17, as that was the gap between Progressive and Ameriprise. :} I can understand someone else having a different price point; I am just saving all the dollars right now.

I want to go back to something I kind of skipped past in your previous comment, about your Prius battery. Does it really die often and without warning? Eek?

Jak and I have both wanted a hybrid or electric car for a long time; the only thing stopping us is the cost. But the idea that one needs regular roadside assistance for dead batteries is disconcerting.

I’ve been with USAA for years, and when I’ve checked (which has been a while) no one was able to beat their rates. As long as their rates are reasonable, I don’t think I’d switch, because the quality of their customer service (actively representing me in claims rather than letting me work it out with the other company) is so high that it’s worth it even if they did cost a bit more.

Hi Mark. USAA has a reputation for good value — they score near the top in Consumer Reports studies, for example. We’re not eligible for their coverage because neither Jak nor I are members of the military, and neither were any of our parents. Otherwise I would certainly have checked their rates as one of my five.

I’m concerned that you think ‘actively representing you in claims’ is an unusually high level of service, however. That should be completely ordinary, and in fact has been the case with every auto insurance company I’ve ever used. I would count ‘leaves you on your own to deal with claims’ as strangely poor customer service, and certainly cause for finding a different provider.

My point with this article — which after two comments about customer service I am concerned I may not have communicated well — is not ‘pay less for crappy service’, but that there are plenty of insurance companies with good service, and one of them might be a lot cheaper. Or not — like I said, I stayed with Progressive for several years because they kept having the best deal for us. But I kept checking the competition periodically, so it was an informed decision.